Cooperative banks disbursed Rs 1,62,556 crore in loans to small and marginal farmers during 2024–25, accounting for nearly 63% of their total agricultural credit of Rs 2,57,687 crore, Union Minister for Cooperation Amit Shah informed the Rajya Sabha on Wednesday.
In a written reply, Shah said the figures highlight the crucial role played by cooperative banks in supporting small and marginal farmers and strengthening rural credit delivery.
He noted that the government has introduced several measures to increase institutional credit flow to underserved agricultural segments. Under the Reserve Bank of India’s Priority Sector Lending (PSL) guidelines, banks must allocate 18% of their lending to agriculture, with a sub-target of 10% specifically earmarked for small and marginal farmers.
To further improve access to credit, the collateral-free loan limit for agricultural loans has been increased from Rs 1.6 lakh to Rs 2 lakh per borrower, enabling more farmers to access formal credit without providing security.
Shah also highlighted the Centre’s scheme for the formation and promotion of 10,000 Farmer Producer Organisations (FPOs) with a budget outlay of Rs 6,865 crore till 2027-28. The programme, supported by a Rs 1,000-crore Credit Guarantee Fund set up by the government and National Bank for Agriculture and Rural Development, aims to strengthen farmers’ collective access to credit, technology and markets.